Pursuant to Regulation 34(3) and Para B of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the amendments thereof, details of the Management discussion and analysis are given below:
Industry Structure & Development
Coal has historically fuelled Indias rise, bringing energy to millions of households and generating useful economic activity. It continues to be the mainstay of Indias energy mix, even as concerns over climate change and air pollution have highlighted the need to pursue a more sustainable path forward.
As per IEAs India Energy Outlook 2021, even though coals share in Indias total primary energy demand will steadily decline in percentage terms from 44 per cent in 2019 to 34 per cent in 2040 (stated policies scenario), demand for coal will still grow by 31 per cent over the same period in absolute terms, from 413 million tonnes of oil equivalent (mtoe) in 2019 to 541 mtoe in 2040.
Opportunities and Challenges, Risks and Concerns
The Government of India has projected that the overall demand for coal would far exceed the domestic supply in the current financial year. The development assumes significance in the wake of certain parts of the country grappling with power outages in the wake of coal shortage, which has compelled companies to import dry fuel for the first time in seven years to meet the demand of power plants. With the demand for coal expected to rise in future, Company expects to tap the demand, leading to potential growth opportunities.
Growing infrastructure like roads and highways, railways, aviation, shipping, energy, power or oil & gas will boost the demand for specialized steel and the Company also expects to revive the operations as the demand for sponge iron products seems better in the future with economic and Industrial growth.
During the year under review, the Company generated revenue through trading of iron and coal. The company has leased its Sponge Iron Plant to MTC Business Pvt. Ltd and source of income from the said lease has been accounted for.
In the recent years, the demand for Sponge Iron is sluggish. The factors like COVID-19 pandemic, slowdown in infrastructure and constructions, fluctuating volatile raw materials prices, regional demand & supply imbalances, and INR Value against global currencies have impacted significantly the Indian steel industry. Cheap import of steels products from neighbouring countries may result in the lowering prices and making the market highly competitive.
The management has initiated steps to revive the company with various other business opportunities with positive economic outlook and improvement in industrial growth in forthcoming years.
Internal Control Systems
Internal control systems continued to function as effectively as in the past. Top management and the Board of Directors and the Committees thereof continue to be actively involved in ensuring that all controls work as intended.
Financial and Operations Performance
The Companys revenue from operations for the year under review is Rs. 24,00,000 during the period 2021-22 and 2020-21 signifying an increase of 0%. The increase in revenue during the year under review is attributed to the increase in the Investment activities. The operating profit has also seen a significant jump during the year under review. The Company has identified the following as Key Financial Ratios:-
|Particulars||Unit of Measurement||
March 31, 2022
|March 31, 2021||Variation in %|
|Current Ratio||In multiple||19.96||0.72||19.24|
|Debt-Equity Ratio||In multiple||1.66||-||1.66|
|Return on Equity Ratio||In %||3.15||(3.44)||6.58|
|Net Profit Ratio||In %||72.88||(3,331.19)||3,404.07|
|Return on Capital Employed||In %||84.71||(687.45)||772.16|
|Return on Investment (Assets)||In %||60.09||(72.60)||132.69|
The Company does not have any debt/ borrowings, hence disclosure of Debt-Equity Ratio is not applicable. Ratios where there has been a significant change from FY 2020-21 to FY 2021-22 are explained below :-
1. Efficient collection practices has resulted in the higher Debtors Turnover Ratio.
2. Increased operating margin and net profit margin is owing to the increase in the operating revenue.
3. Higher current ratio is indicative of the Companys abilities to meet its short-term obligations.
4. Increase in profit has resulted in the higher Return on Net Worth.
Human Resource Development
There have been no material developments in the Human Resource.